Economist: Expect Florida jobs increase, economic growth

Lecturer says excess housing backlog to be cleared out by 2018

St. Johns County’s unemployment rate is one of the lowest in Florida and may even go lower soon, Wells Fargo Senior Economist Mark Vitner said Monday.

Vitner was the featured speaker at St. Johns County’s Economic Development Council’s quarterly breakfast at the Renaissance Hotel in World Golf Village and he told several hundred business and government executives there that the next four years will be ones of growth.

“We are on a steady trend line of recovery,” he said. “It’s looking very positive in the short and long term.”

The official numbers proving his assertions will come out in March, he said, adding that St. Johns County housing is gaining market share.

“We haven’t cleaned up the foreclosures, partly because some of the houses left are physically, geographically and legally challenged. New home inventories are the lowest they’ve ever been and buyer traffic has improved. We can expect a 30 percent increase in St. Johns County construction,” he said.

Vitner believes it will be 2018 before the excess housing backlog is cleared out.

“We’re going to recover all through that period,” Vitner said, pointing out that the county gets 4,500 new residents a year and issues about 2,100 building permits.

Norman Gregory, vice president of economic development for the St. Johns County Chamber of Commerce, said growth locally is “very robust. Companies are looking to take advantage of out high quality of life, our culture, low prices and schools, as well as our ability to enjoy life.”

However, according to Vitner the national economic picture will not be as positive.

“Business is always concerned about potential changes in the tax code. They put off ordering equipment and are cautious in hiring and investment,” he said. “We did not get a clean resolution of the fiscal cliff.”

The budget situation makes things worse.

“In March we’ll hit the trifecta: a vote on the debt ceiling, the sequester, where spending could go half to defense and half to nondefense, and funding the government. We have to get past the fiscal impasse,” he said.

Interest rates must rise — “They have nowhere to go but up.” — but they’ll remain on hold until mid-2015, he said, adding that they could rise sooner but not in 2013.

“People in business I’ve spoken to say that they are having trouble finding qualified workers,” he said. “They can’t find workers able to pass a simple reading test, one that’s on the fourth or fifth-grade level, or a math test. These are very basic skills. (Job hunters) must also be drug-free.”

Also troublesome is the effect of the Affordable Care Act.

“It won’t kill business,” Vitner said. “But it’s an added burden on business. And all that will occur before anything positive is accomplished (in health care). A lot of the promised savings only exists on paper. If it does what it’s supposed to do, make health care more efficient, the biggest reduction in jobs will come from the health care industry.”

Vitner said payrolls are 8.5 percent lower than where they were prior to the recession.

His dire warning: In 15 years, Social Security, Medicare and disability payments and interest on the national debt will take everything that comes in from taxes.

“In the United States, we always wait for the last minute to solve crises,” he said. “Once we get past the uncertainty, things will brighten considerably.”